Rural Development Test - 2

NABARD is a financial institution that was set up by the Indian government to promote sustainable agriculture and rural development in the country. The functions of NABARD include the propagation of technological innovations, financial and non-financial solutions, and institutional development.
NABARD is responsible for regulating and supervising the functions of cooperative banks and RRBs (Regional Rural Banks).
NABARD does not directly helps farmers, it helps through cooperative banks and RRBs.

Micro Credit Programme
Definition: A micro credit programme is a financial service that provides small loans to low-income individuals or groups who lack access to traditional banking services, such as small farmers or self-help groups.
Types of Micro Credit Programmes:
1. Credit provision made by small farmers: Small farmers can access micro credit programmes to meet their financial needs for agricultural activities. These loans are specifically designed for small-scale farmers who may not have collateral or credit history to qualify for traditional loans.
2. Credit provisions made by self-help groups to its members: Self-help groups (SHGs) are community-based groups formed by individuals with similar socio-economic backgrounds. SHGs pool their savings to provide micro loans to their members. These loans are used for income-generating activities or to meet personal financial needs.
3. Credit provision made by large farmers: Although micro credit programmes are typically aimed at supporting small-scale farmers, in some cases, large farmers may also access these programmes to meet their financial needs. However, it is important to note that the primary focus of micro credit programmes is to provide financial services to low-income individuals or groups.
4. None: This option indicates that there is no credit provision made by any entity or group for small farmers or self-help groups.
Answer: The correct answer is option B, which refers to credit provisions made by self-help groups to their members.

Introduction of SHG:
- Self Help Groups (SHGs) are small voluntary associations formed by a group of individuals, usually from similar socio-economic backgrounds, to collectively save money, provide mutual support, and engage in income-generating activities.
- SHGs are an important tool for poverty alleviation and women's empowerment, particularly in developing countries.
Year of Introduction:
- SHG was introduced in 1992.
Explanation:
- The concept of SHGs originated in Bangladesh in the 1970s as part of the Grameen Bank model developed by Nobel laureate Muhammad Yunus.
- However, it was in 1992 that the National Bank for Agriculture and Rural Development (NABARD) in India launched a pilot project to promote SHGs as a means of providing financial services to the rural poor.
- The project was implemented in the state of Andhra Pradesh, and it was a huge success, leading to the replication of the model in other states and eventually becoming a nationwide movement.
- Since its introduction, SHGs have played a significant role in promoting financial inclusion, poverty reduction, and women's empowerment in India and many other countries.
Conclusion:
- SHGs were introduced in 1992 as a pilot project by NABARD in India.
- It has since become a widely adopted approach for poverty alleviation and women's empowerment globally.

Non-institutional sources of agricultural credit:
- NABARD: NABARD (National Bank for Agriculture and Rural Development) is a financial institution that provides credit facilities to farmers and rural development organizations. It offers various loan schemes and supports agricultural activities in rural areas.
- Commercial banks: Commercial banks play a significant role in providing agricultural credit. They offer loans to farmers for purchasing agricultural machinery, seeds, fertilizers, and other inputs required for farming. They also provide working capital loans for agricultural operations.
- Regional banks: Regional rural banks (RRBs) are specialized banks that focus on providing credit to the agricultural sector. They are governed by NABARD and offer loans to farmers at affordable interest rates.
- Traders: Traders in the agricultural sector often provide credit to farmers in the form of advances against future produce. This informal credit system allows farmers to meet their immediate financial needs by availing credit from traders against the promise of selling their crops to them.

Answer: D. Traders.
Traders are a non-institutional source of agricultural credit and provide advances to farmers against their future produce. This form of credit is widely prevalent in rural areas and helps farmers meet their immediate financial requirements. While NABARD, commercial banks, and regional banks are institutional sources of agricultural credit, traders play a significant role in the informal credit system.

Institutional sources of agricultural credit:
- Regional banks: Regional banks, such as Regional Rural Banks (RRBs) and State Cooperative Banks, play a significant role in providing agricultural credit. They are specifically designed to cater to the credit needs of the rural and agricultural sector.
- Commercial banks: Commercial banks, including public sector banks and private sector banks, also provide agricultural credit. They offer various loan products, such as crop loans, term loans, and agricultural gold loans, to meet the financial requirements of farmers and agricultural activities.
- NABARD: The National Bank for Agriculture and Rural Development (NABARD) is a specialized financial institution that provides credit and other support to agriculture and rural development. NABARD refinances commercial banks, regional rural banks, and cooperative banks for agricultural lending.
Excluded source:
- Money lenders: Money lenders are not considered institutional sources of agricultural credit. Money lenders are individuals or small entities that lend money to farmers or rural borrowers at high-interest rates, often exploiting their vulnerabilities.
Therefore, the institutional sources of agricultural credit except money lenders are regional banks, commercial banks, and NABARD.

Explanation:

When farmers need credit for consumption purposes such as on marriage, birth, or death, it is referred to as unproductive credit.

Government of India, Department of Agriculture, Cooperation &Farmers Welfare and Ministry of Agriculture &Farmers Welfare launched the Kisan Credit Card Yojana. Small Farmers can apply for the Kisan Credit Card Scheme to get benefits of  PM Kisan Samman Nidhi and Loan from various banks.

Apex Institute Providing Re-finance Facilities for Rural Credit
The apex institute at the national level that provides re-finance facilities to institutions engaged in providing rural credit is NABARD (National Bank for Agriculture and Rural Development). Here is a detailed explanation:
1. NABARD: National Bank for Agriculture and Rural Development
- NABARD is an apex development financial institution in India.
- It was established in 1982 under the Act of Parliament.
- The primary objective of NABARD is to promote rural development by providing financial support and refinance facilities to institutions involved in agricultural and rural credit.
- NABARD plays a crucial role in channelizing and coordinating the flow of credit to agriculture and rural sectors.
- It provides re-finance facilities to various banks, regional rural banks, cooperative banks, and other financial institutions engaged in providing credit to farmers, rural artisans, and other rural entrepreneurs.
- The re-finance provided by NABARD helps these institutions in meeting the credit requirements of the rural population.
2. Functions of NABARD:
- Promoting and developing agriculture and rural sectors through financial and technical assistance.
- Providing re-finance facilities for agriculture and rural credit.
- Providing loans and grants to state governments and other agencies for rural development projects.
- Promoting rural infrastructure development, including irrigation, rural roads, and warehousing facilities.
- Conducting research and providing training and consultancy services in the field of rural development.
- Monitoring and evaluating the impact of various rural development schemes and programs.
In conclusion, NABARD is the apex institute at the national level that provides re-finance facilities to institutions engaged in providing rural credit. It plays a crucial role in promoting rural development and ensuring the availability of credit to the rural population.

NABARD stands for National Bank for Agriculture and Rural Development.
Explanation:
NABARD is a financial institution that aims to promote sustainable and equitable agriculture and rural development in India. Here is a detailed explanation of NABARD and its functions:
1. National Bank for Agriculture and Rural Development:
- NABARD stands for National Bank for Agriculture and Rural Development.
- It was established on July 12, 1982, under the NABARD Act, 1981.
- The headquarters of NABARD is located in Mumbai, Maharashtra, India.
2. Functions of NABARD:
- Providing credit and financial assistance to agricultural and rural development activities.
- Promoting and developing rural infrastructure, including irrigation, roads, warehouses, and markets.
- Supporting research and development in agriculture and rural development.
- Providing training and education to farmers, self-help groups, and rural entrepreneurs.
- Implementing government schemes and programs related to agriculture and rural development.
- Acting as a regulator for cooperative banks and regional rural banks.
3. Role of NABARD:
- NABARD acts as a financial intermediary between the government, financial institutions, and rural development agencies.
- It provides refinance facilities to commercial banks, cooperative banks, and regional rural banks for lending to agriculture and rural sectors.
- NABARD also provides direct lending to agriculture and rural sectors through its Rural Infrastructure Development Fund (RIDF) and other specialized funds.
- It plays a crucial role in channelizing credit and resources to promote rural entrepreneurship and agricultural activities.
- NABARD also focuses on promoting sustainable agricultural practices, rural livelihoods, and inclusive growth.
In conclusion, NABARD stands for National Bank for Agriculture and Rural Development. It plays a vital role in promoting agriculture, rural development, and financial inclusion in India.

Bharat nirman - It is an Indian bussiness plan for creating and augmenting basic rural infrastructure .It comprises projects on irrigation,roads, housing, water supply , and telecommunications connectivity.